Flowchart 3.1

Treatment of bonus shares issued on or after 20 September 1985

1. Did you acquire the original shares on or after 20 September 1985?

2. Is any part of the bonus shares a dividend or treated as a dividend?

3. Were the bonus shares issued before 1 July 1987?

4. Is any part of the bonus shares a dividend or treated as a dividend?

5. Were the bonus shares issued before 1 July 1987?

6. Are the bonus shares partly paid?

7. Were the bonus shares issued before 10 December 1986?

8. Before sale of the bonus shares, were any further call payments made to the company?

Answer 1:

1. The bonus shares are subject to capital gains tax.
2. The bonus shares are acquired when the original shares were acquired.
3. The cost base of each original and bonus share is equal to
   • the cost base of the original shares divided by the total number of original and bonus shares, plus
   • any calls on partly paid bonus shares.
    

Answer 2

1. The bonus shares are subject to capital gains tax if issued on or after 20 September 1985.
2. The acquisition date of the bonus shares is their date of issue.
3. The cost base is the amount of the dividend plus any calls on partly paid bonus shares.

Answer 3

1. The bonus shares are subject to capital gains tax.
2. The acquisition date of the bonus shares is their date of issue.
3. The cost base is the amount of the dividend, plus any calls on partly paid bonus shares.

Answer 4

You are taken to have acquired the bonus shares before 20 September 1985 and they are not subject to capital gains tax.

Answer 5

1. The bonus shares are subject to capital gains tax.
2. The acquisition date of the bonus shares is the date when the liability to pay the first call arises.
3. The cost base is the market value of the bonus shares just before the liability to pay the first call arises, plus the amount of call payments made.